Ok first off our trade deficits are terrible because it is the export of wealth from the country. The wealth is transfered out of the country to others. They now sit on all these dollars. What can they do with it? They buy our debt and then they invest in our industries. They do this and make more money. Then what happens is they reinvest even more and more in the country. This is an endless cycle here. The problem is that at some point people start to loose their confidence in our economy as our debt to others grows. Just like as has been said by jseal a credit card. Well unfortunately....as you build a larger and larger and larger balance you eventually get to the point where hey i cannot make the minimum payment. Well what happens when the us can no longer make that payment and no one will lend us more money to pay the interest? We get screwed. Our dollar value will fall into worthlessness and we will have problems. Then look at for example china. They are sitting on huge amounts of dollars. Why is this a problem? Well sure we get crap cheap from them now....but we weaken ourselves. We loose our ability to manufacture at the levels that we need if lets say there is a war. We loose our high tech and defense manufactures and then we get hurt because we dont make our own tanks etc. Did you know for example boeing is building a plant in vietnam? Well back to china. Imagine what will happen if they were to dump all that onto the market? Down it goes. Also it becomes a weapon. Say we want energy and they want the same. We can afford it. Well they dump enough currency on the market so that ours isnt worth enough. Now we cannot afford it. Or they use it as a threat. Say in war this happen. We can no longer buy from our allies. Shall I continue? BTW jseal your argument doesnt work. At a certain point credit cards run out of available credit. We cannot print money either. Only the government can do this. Only the government can get away doing this without any stopping it.

P.S. Check the amount of that the us actually owns of their own industries and natural resources. U will be very surprised.